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Some observers argue the media and some
economists are exaggerating the impact of the UK vote a week ago.They talk about the petition for a second referendum. They
about Scotland vetoing the decision to leave the EU. They talk about the UK never invoking Article 50 and
rehash all the ways the EU has subverted the popular in recent years. These d…

Great Graphic: What are UK Equities Doing?
Reviewed by Marc Chandler
on
June 30, 2016
Rating: 5

The global capital markets have quieted
considerably since the start of the week. Month and quarter-end considerations
appear to be playing a role. Also, there is a sense it will take some
time to sort things out. Perhaps the biggest surprise is how ill-prepared
the leave camp was for its victory. There was no game plan. There
is no agreement…

After plummeting 18.6 cents, mostly in a few hours after it became
clear that the Brexit would carry the
day, sterling has rallied four cents from
the low set on Monday. We recognized that the
magnitude of the drop left sterling
technically over-extended, but we caution against suggests that the worst is
behind us and that a durable low is in pl…

The Worst is Yet to Come--Don't be Seduced by the Price Action
Reviewed by Marc Chandler
on
June 29, 2016
Rating: 5

No fundamental
development can compare with the UK decision to leave the EU.It has set off a chain reaction whose outcome is still far
from clear. Sterling is firm, alongside
most of the major and emerging market currencies today. Sterling narrowly
edged above yesterday's highs to reach almost $1.3425 before encountering
selling pressure. E…

How exceptional are market developments? Much rests on the answer. If these are
extraordinary circumstances, then Japanese intervention becomes more likely.Of course,
Japanese policymakers have been inclined to intervene before the UK referendum
but were seemingly rebuffed by its G7 partners. In Europe, the
designation of "exceptional circum…

How Exceptional are Conditions?
Reviewed by Marc Chandler
on
June 28, 2016
Rating: 5

The global capital markets are stabilizing for the first time
since the UK referendum. It is not uncommon for markets to move in the direction of
underlying trends on Friday's; see follow-through gains on Monday, and a
reversal on Tuesday. That is what is happening today. Turnaround
Tuesday after such dramatic price action over the last two…

Markets Stabilize on Turn Around Tuesday
Reviewed by Marc Chandler
on
June 28, 2016
Rating: 5

ThisGreat Graphicshows sterling's monthly performance
since 1971, according to Bloomberg data.There have been several powerful trends. The rally from
$1.40 to $1.50 in the week following Cox's murder was understandable to us. The assassination broke the momentum
that we also recognized had been building in
favor of Brexit. But to catch t…

The UK has decided to seek a divorce from the EU after a 43-year
rocky marriage. It was not an overwhelming decision.
Brexit won by 52%-48% margin, seemingly too small for such a momentous
decision. The UK has not decided exactly when it will formally begin the
divorce proceedings, and it wants to be friends
still. Many fear the
UK decision is the…

Sterling has been sold beyond the panic low seen when it became clear that UK
voters were choosing to leave the EU though nearly every economists warned of
at least serious short- to medium-term
negative economic implications.The UK is in disarray. We remain struck by what appears to
be the lack of a game plan by the leaders of the Brexit movement…

The Brexit vote is a game-changer for EM. While the direct impact on EM is limited, the damage to market sentiment is undeniable. And to make matters worse, there will be a protracted period of uncertainty as the UK and the EU negotiate the divorce proceedings. We do not think individual country stories will matt…